European stocks rally to end turbulent month
European stocks jumped on Wednesday, tracking a rebound across Asia, as US futures extended gains on the last day of one of the worst months for global equities in years. The dollar edged higher alongside treasury yields.
Almost every sector on the Stoxx Europe 600 Index advanced, with miners and industrial companies leading the way, as US shares looked set to build on their rally from a day earlier. Italian bonds bucked a decline as core European debt followed Treasuries lower. The euro edged down as inflation accelerated in October and underlying price pressures increased, handing policy makers a headache after growth data disappointed.
In Asia, Japanese stocks were the stand-out performers as indexes rose across the board. China’s overnight repo rate surged the most in more than four years as authorities take steps to combat bets against the yuan, which held near the weakest level in a decade against the greenback. The yen was steady as the Bank of Japan left its monetary stimulus unchanged and kept its 10-year bond yield target at about zero per cent.
Equity bulls will be hoping this rebound can last following a series of bounces in the past few weeks that quickly gave way to declines as some $8 trillion was wiped off stock markets globally. The MSCI All-Country World Index has dropped more than 8 percent in October, poised to post the worst monthly performance in six years.
Corporate results may be key to
sustaining the share gains: attention will next turn to earnings from Apple Inc. on Thursday. But trade risks are simmering in the background, the U.S. jobs report is due Friday and the American midterm elections are creeping closer — all of which have the potential to further roil markets.
Elsewhere, Australia’s dollar edged lower following a weaker-than-expected inflation reading and as a closely
watched gauge of China’s economy showed worsening manufacturing activity. Gold declined and oil edged up from a two-month low.
And in emerging markets, the Indian rupee pared a drop after the finance ministry moved to diffuse growing tensions with the central bank. Developing-nation stocks jumped as currencies edged lower.